In 1997, we joined with 3i to back the £80m (€120m) buyout of Thomson Directories from US West.
At the time of the acquisition, Thomson occupied the No.2 market position behind the Yellow Pages (the market leader owned by the formerly nationalised British Telecom) with its "Thomson Local" directories reaching 85% of UK homes and businesses.
With such a high level of market penetration, Thomson's future growth lay in improving the performance of the business through a combination of cost rationalisation and new product development. Following a review of operating procedures, which saw the company's publishing operations brought in-house, the profits of the business doubled over a two year period, attracting offers from several trade buyers. Believing that future growth was still attainable and a higher valuation therefore possible, we elected to retain our shareholding and remain invested in the business.
The launch of an on-line version of its directories in 1999 further improved the company's performance and in 2000 Thomson (TDL Infomedia) was acquired by SEAT Pagine Gialle (Milan: SPG/IM), one of Europe's leading publishers of telephone directories, valuing the business at £488m.